MARCH 19 2014 (The Conway Bulletin) — Kazakhstan will launch new rules by end-2015 aimed at stemming the flow of cash from businesses to offshore accounts, media quoted the head of analysis at the Kazakh financial police, Olzhas Bektenov, as saying. Kazakhstan has been under pressure to tighten its anti-money laundering regulations.
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(News report from Issue No. 177, published on March 26 2014)
MARCH 20 2014 (The Conway Bulletin) — A court in Pavlodar, north Kazakhstan, jailed four Kazakhs who had trained with Islamic radicals in Syria, media reported. The Kazakhs were arrested in Turkey after crossing from Syria. Governments in Central Asia and the South Caucasus are increasingly concerned about people becoming radicalised in Syria.
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(News report from Issue No. 177, published on March 26 2014)
MARCH 25 2014 (The Conway Bulletin) — Prince Harry, third in line to the English throne, spent a long weekend in mid-March skiing at the Kazakh ski resort of Shymbulak, the Sun newspaper reported.
Grainy photos later appeared of Prince Harry posing for photos at the bottom of the slope. He apparently flew to the top of the piste in a hired helicopter.
By design or by accident, Prince Harry’s trip to Shymbulak is the best PR that the resort could have hoped for. Only last month, Kazakhstan unveiled its bid to host the Winter Olympics in 2022. Shymbulak was the centrepiece of this bid.
Shymbulak is still a curious choice for Prince Harry and his girlfriend Cressida Bonas to choose for a weekend break. It’s a long way from Europe, the jet-leg is heavy and, despite Kazakh PR proclaiming the opposite, the runs are limited compared to the Alps.
Even Kazakhstan’s wealthy prefer skiing in St Moritz and Chamonix.
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(News report from Issue No. 177, published on March 26 2014)
MARCH 25 2014 (The Conway Bulletin) — Kazakh president Nursultan Nazarbayev met US president Barack Obama on the sidelines of a nuclear security conference in the Hague, the Netherlands. Other than an anodyne joint declaration on nuclear security, neither side gave details on what was discussed. Kazakhstan has supported Russia’s annexation of Crimea.
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(News report from Issue No. 177, published on March 26 2014)
MARCH 25 2014 (The Conway Bulletin) — Along Kazakhstan’s southern border hundreds of labourers are working on a project that is supposed to reignite the old Silk Road and turn the country into a central trading hub once again.
It’s an ambitious $5.5b project to build a road that crosses this vast arid land prone to freezing, heavy winters and burning, hot summers.
Kazakh president Nursultan Nazarbayev inaugurated the project in September 2009. Nearly five years later, work is still ongoing.
At a roadside outside Shymkent, a teeming city of 650,000 people on the border with Uzbekistan, Baurzhan surveyed his road-building teams.
“Our company is a small private local enterprise and we won a small tender. Together with other local companies we are building most access roads and smaller sections of the highway,” he told a Conway Bulletin correspondent.
“Our work is going well, but severe weather has delayed our work by at least three months.”
Heavy snow storms have smashed into southern Kazakhstan this year, flooding villages and infrastructure.
The road is supposed to link Lianyungang on China’s eastern coast with St Petersburg in Russia. It’s an 8,445km stretch, with 2,787km cutting through the Kazakh steppe.
But there is some debate over whether Kazakhstan will actually benefit from this super-highway.
In Shymkent, Nurzhan, a 26-year-old British educated university graduate, said: “The road won’t benefit Kazakhstan, as we will only be the link between two bigger markets.”
A commercial truck driver disagreed. “My brother is buying fifty brand new trucks,” he said. “We hope this investment will bring returns as soon as trade starts.”
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(News report from Issue No. 177, published on March 26 2014)
MARCH 20 2014 (The Conway Bulletin) — The Kazakh government plans to buy a new embassy building in Paris for $55m, media reported. The vice-minister for foreign affairs, Rapil Zhoshybayev, defended the purchase as value for money because the housing market in Paris is rising. Kazakhstan has been upgrading its embassies around the world.
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(News report from Issue No. 177, published on March 26 2014)
MARCH 14 2014 (The Conway Bulletin) — Hundreds of people living in a town in the western Kazakh province of Mangistau protested against soaring joblessness after reading an interview by their mayor in which he boasted of unemployment of only 0.4%, media reported. Inhabitants said unemployment was nearer 40%.
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(News report from Issue No. 176, published on March 19 2014)
MARCH 14 2014 (The Conway Bulletin) — Kazakhstan’s state news service Kazinform said it would publish a Chinese-language website, underlining how important China has become to Kazakhstan. Over the past half a decade or so, China has increasingly become Kazakhstan’s main economic partner. It owns a third of Kazakhstan’s oil and gas reserves.
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(News report from Issue No. 176, published on March 19 2014)
MARCH 12 2014 (The Conway Bulletin) — The impact of Kazakhstan’s 20% currency devaluation last month is beginning to filter through to business.
Kazakh senator Mikhail Bortnik said that unless JSC International Airport Aktau could restructure its dollar-denominated debt, it would go bankrupt.
JSC International Airport Aktau, which under a deal with Mangistau regional government is owned by Turkish company ATM until 2025, has re-built Aktau airport’s passenger terminal and runway over the last few years.
It is now Kazakhstan’s third busiest airport, behind Almaty and Astana, and hosts flights from Baku, Kiev, Moscow and central Europe.
But after February’s tenge devaluation the $47m debt that Mangistau regional government took on to re-build the airport from the state-run Development Bank of Kazakhstan (DBK) has become 20% more expensive to service.
The problem for the DBK is that if it agrees to restructure the Aktau airport debt, it may have to restructure several other company debts too.
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(News report from Issue No. 176, published on March 19 2014)
MARCH 14 2014 (The Conway Bulletin) — A rare admission from a Kazakh insider that the country’s energy policies may not be working hints at future fuel price increases, analysts have said.
Sauat Mynbayev, chairman of state-owned KazMunaiGas, said sending Kazakh oil to China to be processed into fuel and then re-importing it to make up for a shortfall in domestic refining capacity has become too expensive.
“The transit operations regarding the refining of Kazakhstan’s oil in China has become unprofitable,” media quoted him as saying.
Analysts immediately unpicked his statement. What this meant, they said, was that fuel prices would rise shortly.
And that, as the government knows, will be deeply unpopular.
Oil-rich Kazakhstan has a chronic lack of refining capacity. The three refineries at Shymkent, Pavlodar and Atyrau are often under repair. New refineries are only scheduled to come on-stream in five or six years time.
To make up for the shortfall, Kazakhstan is importing refined fuel from China and Russia. It is also sending unrefined fuel into China for processing and then shipping it back over the border.
Added to this complex arrangement is Kazakhstan’s 20% currency devaluation in February which makes imports even more expensive.
Mr Mynbayev has just been made head of Kazakhstan’s Greco-Roman wrestling federation, a position that underlines his insider credentials.
For an insider to admit a policy problem is almost unheard of in Kazakhstan. As analysts have now warned, expect fuel price increases.
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(News report from Issue No. 176, published on March 19 2014)